Did the CBO Get It Right?

And what, exactly, is the CBO's role?

Monday's release of the Congressional Budget Office (CBO) estimate of the economic and insurance impact of the Republicans' Affordable Care Act (ACA) replacement plan shined a spotlight on a little-known government agency.

CBO's creation was "part of an attempt by Congress to try to strengthen role of Congress vìs-a-vìs the president in budget process, and it came directly in response to President Nixon, who was not known for his [desire] to share power," Joyce said in a phone interview. "This bill was literally the last bill Nixon signed before he resigned from office."

People have asked why any president in his right mind would sign such a piece of legislation, since it's clear it would weaken the strength of the presidency and strengthen Congress's hand in budget matters, Joyce said, "but Nixon felt he needed all the friends he could get and that he had no choice but to sign the legislation."

A Non-Partisan Information Source

"The idea behind the CBO was to provide non partisan, objective information to Congress on exactly this type of thing -- the cost of a piece of legislation so Congress knows what it's dealing with before it votes on something," he explained. "Prior to the creation of the CBO, the estimate would come from the president's Office of Management and Budget" and could be colored by whether or not the president liked a particular bill.

Just so, agreed Virginia Commonwealth University health policy expert Andrew Barnes, PhD, who said in his experience the CBO lived up to that "fair and balanced" goal. "I believe that health policy experts and health economists, and indeed Congress, view the CBO scoring of bills as valuable, trusted, and credible source of critical information on which to make evidenced-based policy decisions," Barnes wrote in an email.

The CBO's scoring of the GOP's American Health Care Act seems "perfectly logical to me," said Joyce. "What CBO found is [basically] that this is going to save a fair amount of money -- $337 billion over 10 years -- and it's going to mean a lot of people who would have health insurance now, won't have health insurance after the bill passes. It makes government smaller by guaranteeing that fewer people have government-sponsored or government-provided health insurance. That to me is the bottom line."

That assessment was echoed by Emory University's David Howard, PhD, who added, "It is hard to imagine other groups developing better predictions than the CBO."

However, he added, "As was the case with the ACA in 2010, the changes currently being contemplated are unprecedented. In statistics parlance, the CBO is making an 'out of sample' prediction."

Estimate is "In the Ballpark"

Despite its commitment to taking fair and balanced assessments, the CBO can be off the mark -- sometimes far off the mark and one of those cases was in its estimates for the Affordable Care Act, noted Joshua Sharfstein, MD, professor of health policy at the Johns Hopkins University Bloomberg School of Public Health.

The CBO works to develop ballpark estimates, but sometimes the foul pole is moved, which explains a bit of how the CBO went off the tracks with its ACA scoring. Sharfstein pointed out that "the CBO didn't realize the Supreme Court would [make] the Medicaid expansion [not mandatory]. You can't predict the future with certainty, but most people respect that the CBO will do a very serious job."

The CBO significantly overestimated the number of people who would gain coverage under the ACA, but it wasn't alone in making that mistake. "There was a Commonwealth Fund study that evaluated CBO and the other people who had looked at the ACA and what they found was basically nobody ... got very close to what actually occurred, but that CBO -- relative to others who had analyzed this -- got closer to the mark," said Joyce.

A health management professor from the University of Pennsylvania's Wharton School sounded a more cautious note about this latest CBO report.

"Estimates of the number becoming uninsured seem on the high side to me; they are highly dependent on how states respond to changes in Medicaid financing, which ought to have less of an effect on the number with coverage and more of an effect on generosity of coverage," Mark Pauly, PhD wrote in an email. "But they are plausible and reflect the Administration's policy decision to reduce federal spending on government health insurance, which will cause some people to choose not to take insurance coverage because it has become more costly for them."

Did It Serve Its Purpose?

Has the CBO's report served its intended purpose of shining a non-partisan light on the Republican proposal? "I think we don't know yet," said Joyce. "Its purpose is just to try to illuminate the debate. One of the challenges in this case is that, unless I've missed something, there is no alternate estimate out there" from the Trump administration for the two sides to discuss.

"The only thing I've seen in response to the CBO report is [Health and Human Services] Secretary [Tom] Price saying, well, he just doesn't believe it. 'I just don't believe it' is different than saying, 'Well, the CBO says that by 2026, this means 24 million people who would've had insurance under the ACA would not have insurance, but we believe the number is X, and here's how we get there,'" he said.

If there are serious arguments on the other side, "people should propose legislation now and have it modeled by CBO," said Sharfstein. "I think we're past the point of 'Trust us, it will all be great.'"

The CBO did what it was supposed to given its limited mandate, Gerald Kominski, PhD, professor of health policy and management at the University of California Los Angeles, said in an email. "The fact that the [proposal] would reduce the deficit by $337 billion over a decade completely ignores the impact on state and local government budgets, not to mention the impact on 24 million uninsured Americans in terms of their out-of-pocket costs and their health deficits. But that's not CBO's job, and this report is in keeping with CBO's scope of responsibility."

And for those who were sounding warning alarms when two congressional committees passed parts of the proposal without a CBO estimate in front of them, Joyce has this advice: chill.

It isn't that unusual for committees to move forward ahead of the CBO.

But Joyce said there was one unusual aspect to the current process: the lack of informal back-and-forth between the CBO and the congressional committees.

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